NCFA Fintech Confidential December 2020 (Issue 3)

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MAKING BUSINESS PAYMENTS MOVE. Unleashing $1.5 trillion in productivity for small business It is hard to believe that, in 2018, over 15 billion cheques were processed in Canada and the United States alone. That equals to 41 million cheques every single day. How is that possible in our digital world, where the news is read on tablets, birthday wishes are made through Facebook, and groceries are ordered online? And why is the North American payments system so far behind when most European countries abandoned the paper cheque years ago? One of the main factors is the huge gap between consumer payments and commercial transactions. Over the past decade, consumers have consistently adopted digital payment methods, like Interac eTransfer or Venmo in the U.S.. The business payments environment however, is lagging behind drastically. Indeed, paper cheques remain still the most commonly used payment method for commercial transactions. It is no secret that manual processes and paperwork are causing supply chain friction, inefficiency, and revenue losses. What most people don’t know is that it’s small-to-medium sized businesses that carry the weight of this outdated payments system. Consider the number of cheques processed compared to the processing volume of cheque transactions. While the number of cheques has steadily declined over the past years, the average transaction size of a cheque has gone up—indicating that businesses still see value in these payment types for high-value transactions. It is fair to say the absence of a convenient electronic alternative to process large payments is the biggest obstacle to the total elimination of the cheque in North America. Transaction limits and percentage charges are barriers of current digital alternatives that hold back businesses from moving away from the cheques. TRUSTED AND REGULATED ACROSS CANADA Matthew Smith, CEO & Co-Founder of Victoriabased <strong>Fintech</strong> start-up MazumaGo discovered this gap in the market through the evolution of his previous business idea: a credit card processing software. When we launched the credit card tool, our customers kept saying that they didn’t want to pay a percentage of their transaction’s value in fees. Then we tried to think of a way to get around using credit cards. Businesses incur over $2.7 trillion in B2B administrative costs—80% of which is paid by small businesses. While it is particularly challenging for smaller companies to make the shift from paper to digital, this is the sector where it matters most. A recent Goldman Sachs study suggests the net result of B2B payments innovation will unleash $1.5 trillion in productivity for global small business. Smith and his two Co-Founders, Nick Addison (CTO) and James Davidson (COO), solved this problem by building a payments processing software that enables businesses to send and receive no-limit payments for a flat fee. With MazumaGo, they combined the simplicity of an eTransfer with the robustness of the banking rails. 76
Payments are processed through secure ACH transactions, which can easily be initiated and tracked online through a simple dashboard. They started by solving payment pain points specifically for small construction businesses and then created solutions which would be accessible for businesses of every size and industry. The company launched in September 2019 under the brand DivDot, and was recently rebranded as MazumaGo. The word Mazuma is Yiddish for money, also known as a slang word for Cash. Following the tagline, “Make business payments move”—the company’s vision is to eliminate any reasons why businesses would want to use cheques and to build a simple, secure network for businesses to exchange funds. – 5+ admin hours saved/month – 10 days faster receivables – Candace Hobin, Community Manager, Rhino Ventures: Rhino Ventures is a Venture Capital firm based out of Vancouver, B.C., that invests in early stage tech companies. As the Community Manager, Candace is in charge of fund operations behind the scenes of investments and capital calls. – “The fact that you can’t actually make a quick online transfer through the bank is really frustrating, so I definitely welcome MazumaGo with open arms. It’s great to use, super simple, and the way banking should be.” – 1 hour faster than a cheque – Up to $45 savings per transaction FINTECH DRAFT Over the first year, the company has seen significant growth, not least on account of the global pandemic. For many organizations and especially small businesses, office closures and remote working mandates created an uncomfortable wakeup call. Under the pressure of staying alive, businesses that still relied on manual, paper-based processes, needed to quickly adopt digital ways of processing funds. MazumaGo offers them an easy solution to digitize payments without expensive transformation costs. After all, the lack of a better solution for businesses to process payments has long existed, the changing business environment only brought it to light. Here are a few insights into customers’ stories of how MazumaGo helped them move away from archaic, inefficient payments processes: – Dave Philips, Business Operations Manager, NZ Builders: NZ Builder specializes in building high performance, energy efficient homes and Dave is the man in charge of sending and receiving high-value payments to keep everyone happy. – “If you boil it down, MazumaGo is the ability to do a massive eTransfer without the limits. And since it goes through the BMO security platform, that alone should make people feel comfortable. The option to send payment links through your own direct email adds a level of trust too.” – Dylan Touhey, Co-Founder, OneNet Marketing Inc.: OneNet Marketing Inc. is a digital marketing agency that helps technology companies acquire new customers. Co-Founder Dylan Touhey works with an internal team of marketing experts and uses MazumaGo to pay subcontractors. – “I used to waste hours standing in line at the bank, talking to tellers, painstakingly getting them to fill out wire transfer forms and making sure all the information is correct. It was a nightmare.” – 20 hours saved/month – 40% higher payment success rate About: Miriam Rader Marketing & Communications Manager MazumaGo MazumaGo is a Victoria-based <strong>Fintech</strong> company that enables businesses to securely send and receive no-limit payments for a flat fee. Founded by Matthew Smith (CEO), Nick Addison (CTO) and James Davidson (COO), the company launched in September 2019 and is now a registered money services business, processing millions of dollars in transactions for Canadian businesses every month. For more information, visit mazumago.com 77
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INSIDER VIEWS, INNOVATION AND BEST
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THE GOOD, THE BAD AND THE UGLY OF C
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Page 69 and 70: CATCHING THE WAVE: CAPITALIZE ON NE
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NCFA Fintech Confidential December 2020 (Issue 3)

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